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Following another record year for the Greater Toronto Area's real estate market, the Toronto Real Estate Board (TREB) has released figures for January 2017, showing that the market has resumed right where it left off at the end of 2016. 5,188 residential transactions were recorded during the first month of 2017, an 11.8% increase over the 4,640 sales reported in January 2016. Most notably, average selling prices increased by 22.3% year-over-year, with the new average home price rising to $770,745.
According to TREB President Larry Cerqua, "[h]ome ownership continues to be a great investment and remains very important to the majority of GTA households. As we move through 2017, we expect the demand for ownership housing to remain strong, including demand from first-time buyers who, according to a recent Ipsos survey, could account for more than half of transactions this year. However, many of these would-be buyers will have problems finding a home that meets their needs in a market with very little inventory."
While sales figures increased, the number of new listings in January 2017 declined to roughly half of the January 2016 figures, underscoring an ongoing lack of supply in the region. "That statistic, on its own, tells us that there is a serious supply problem in the GTA—a problem that will continue to play itself out in 2017. The result will be very strong price growth for all home types again this year," argued Jason Mercer, TREB's Director of Market Analysis.
The commercial market saw a decline in leasing transactions, with 345,658 ft² of combined industrial, commercial/retail and office space leased during January 2017, a sizeable drop from the 555,606 ft² of leased space recorded in January 2016. This decline is being attributed to a combination of a volatile change in average lease rates, and a shift in the type and location of properties leased. Specifically, the number of commercial property sales reported in January 2017 remained stable year-over-year, while the number of transactions in the industrial market increased. This was offset by a decline in commercial/retail and office transactions.
"As we move through 2017, the demand for commercial real estate will depend on a number of factors, including the level of business confidence and economic direction of key trading partners. If GTA businesses remain confident in the direction of the economy at the national, provincial and regional levels, it is possible that we will see further growth in commercial leasing and transactions," said Cerqua.
